The $300 billion bunkering market goes to an important point as a result of the dual whammy of the geopolitical situation and also the unpredictability bordering the governing structure relating to the decarbonization of the delivery market.
“Bunkering has been hit from the trickledown effect of the sanctions against Russia, and this of course has had a serious impact on prices. Pre-war, the global prices were around $750-$850 per ton, and now we are looking at prices above $1,000,” stated Alexander Prokopakis, chief executive officer of probunkers, an Athens- based independent dissolved gas (LNG) shelter distributor, at the Posidonia profession fair in Athens.
“Since we are in unchartered territory, no one can really predict where the price will end up. Hopefully for now we will stay at this level, if not, the effect of exceeding the $1,200 mark will bring about a detrimental ripple effect across the entire shipping industry,” Prokopakis included.
Prokopakis is amongst greater than 40 aquatic gas vendors from all over the world that have actually collected at this year’s Posidonia.
His sights are shared by one more significant bunkering gamer with a solid Greek visibility,Baluco Commercial Manager John Stavropoulos stated, “The price of oil has doubled, and this has created an extra cost for ship operators because oil and lubricants account for almost 60-70% of the total vessel operational expenses. So, the total cost per journey has skyrocketed and that’s not just it. Credit lines for operators have also been impacted as they have to pay double the amount they used to, in order to receive the same volume as they did before the crisis.
They both said that demand for bunkering fuel has not been impacted and has in fact increased at ports outside Russia, as the points of supply have been reduced.
In addition to the impact on fuel prices, shipping companies and their customers are facing increased costs due to more expensive lubricants. Major international lubes maker and supplier Gulf Oil Marine, says that the price increase varies depending on the market.
“We have already seen an increase of between 20 and 30 cents per liter, which is roughly a 20% spike, but I am afraid that we still haven’t seen the end of this pressure on prices. We forecast a further increase of 10-20% by the end of the year, and we are doing our best to mitigate the increases,” stated David Price, Chief Executive Officer.
The battle in Ukraine has actually triggered supply concerns in the lubes field too. According to Gregory Papathanassiou, Director Gulf Oil Marine Hellas, supply has actually been decreased due to the permissions on Russia and also urges that effort all the time is the solution to guarantee and also secure supply safety and security. “We need to ensure that lubricants are available whenever and wherever our customers need it. It causes a lot of hard work and tension. Of course, there remain many issues, but our aim is to ensure our customers don’t see or face these issues for themselves,” he stated.
He included that Gulf Oil Marine has actually just recently bought a mixing plant and also R&D center in Singapore to assist it remain in advance of the contour, however recognizes that obtaining a brand-new lube to market from square one calls for a substantial financial investment and also a great deal of time as the procedure for screening and also authorizations is long.
Nellos Economopoulos, General Manager Valecrest Marine Lubricants, appears to concur: “In order to be able to be ready for the future, we first need to know what the future will be. Once the number one option for the fuel of the future is agreed upon, we then need to start preparing for it, in order to develop the suitable lubes solutions. We need to look at all the options. It would take nearly up to two years to be able to do the research that is required, the testing and the infrastructure to go to market with new lubricants for the new fuel products.”
But as specialists claim, necessity might not be a problem, as the moment when delivery will certainly free itself from its dependancy on nonrenewable fuel source is still years in advance.
Prokopakis stated, “The future is still far. There is no clear path of where we are heading. My view, as biased as it may be, is that LNG is for now the only viable available commercial solution, and it will remain so for the next 15-25 years. The infrastructure is here, it is readily available, abundant and safe, and its environmental footprint is better than that of oil.
“I don’t believe in a one-fits-all dominant fuel solution for the future, similar to what fuel oil is today. I think it will be a case of a diversified energy mix, a blend of various options to choose from.
Many companies have leveraged their Posidonia presence to create awareness about their innovations and new bunkering and lubes solutions.
U.S. lubes manufacturer Calumet Specialty Products Partners from Indianapolis has launched a synthetic lubricant solution. “Our latest solution offers uncompromised performance while still meeting and exceeding stringent European-Ecolabel, US, EPA, VGP/VIDA and other requirements,” stated Rusty Waples, Director of brand name and also item administration.
And U.K.’s Auramarine, a gas and also supporting systems professional, has actually bought the growth of among the market’s very first Methanol Fuel Supply Units to fulfill the need for methanol as an appealing future gas. CHIEF EXECUTIVE OFFICER John Bergman stated, “Shipowners want to invest in green fuels, but the challenge lies in finding the right solution and inspiring confidence to drive uptake.”
